Modelling of the Industrial Sectors has been ad-hoc in macro models. The proportion of industrial sector out in nation output has steadily increased but modellers have ignored the link between industrial sector output and employment. There are various reasons for that. The scenario of industrial sector is changing rapidly and far-reaching changes are taking place in the economy. It has become imperative for the modellers to model industrial sector with its links with employment generation in the economy and policy variables which affect the industrial sector production. As service sector is gaining importance in the economy, it would be ideal to explore links between service sector and industrial sector output and services sector's potential to generate employment in the economy.